China court puts Fanya exchange’s rare earth stock up for auction

The Chinese court auctioning off inventory formerly held by the now-defunct Fanya Metal Exchange has put two batches of rare earths, with a market value of around $41.5 million, up for sale on Aug. 31, along with antimony worth around $97 million.

The auctions are being closely watched by creditors of Fanya owed nearly 40 billion yuan ($5.68 billion) following the exchange’s collapse in 2015, as well as by minor metal and rare earth traders, given the significant volumes potentially coming on to the market.

The Kunming Intermediate People’s Court made two separate announcements on Chinese e-commerce platform Taobao, both dated Aug. 14, on the auctions of rare earths, a group of 17 chemical elements prized for their use in consumer electronics and military equipment.

Bidding was open to all “citizens, legal persons and other organisations with full civil capacity”

The first said 4,050 kg, or 4.05 tonnes, of terbium oxide – used in fluorescent lamps and colour TV tubes – with a market value of 16 million yuan would be open to bids of 12.8 million yuan and upwards for 24 hours from 10 a.m. local time (0200 GMT) on Aug. 31.

Approximately 18,660 tonnes of antimony, with an estimated market value of 682.6 million yuan, that had been held by Fanya will be put on the block at the same time.

The second notice said 148,750 kg, or 148.75 tonnes, of dyprosium oxide – used in ceramics and lasers – was going up for sale at the same time, with a market value of around 277 million yuan and a starting price of just over 221 million yuan.

Asian Metal, an industry data provider which makes price assessments for both dysprosium oxide AM-CN-DYOXD and terbium oxide AM-CN-TBOXD, said these amounted to Fanya’s entire inventory of the two substances.

Both batches are being stored in the rare earth hub of Ganzhou, in China’s southeastern province of Jiangxi, according to the notices.

An official at the court confirmed the auctions, noting that Taobao was the designated sales channel for the stock.

The notices said the bidding was open to all “citizens, legal persons and other organisations with full civil capacity,” without specifying if this included foreign nationals and firms.

The three simultaneous auctions to sell the full inventory point to a change in strategy by the court, which had previously only auctioned off a fraction of the 3,600 tonnes of indium ingots Fanya held.

A Shanghai-based investor in the exchange told Reuters on Thursday there is still no indication when or how much of their initial investments will be returned to them.

($1 = 7.0440 Chinese yuan renminbi)

(By Tom Daly and David Stanway; Editing by Simon Cameron-Moore)

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